Investigations

On December 20, 2017, Peiwen Zhou, the owner of AK Scientific, Inc. (AK) located in Union City, California, pleaded guilty in U.S. District Court, San Francisco, to illegally transporting hazardous materials and failing to properly declare imports of toxic substances.

 

Zhou admitted he failed to adequately train employees at his company on the requirements of the Hazardous Materials Transportation Act (HMTA) and, as a result, he caused AK employees to ship hazardous materials on a number of occasions without properly labeling, marking, and identifying the packages.

 

Zhou also admitted that he caused AK employees to fail to comply with the rules and regulations set forth in the Toxic Substances Control Act (TSCA). Specifically, he admitted that he caused AK employees to fail to file TSCA import certifications on a number of occasions when the company imported chemical substances into the United States, including on one occasion when a substance was shipped to AK under a different name.

 

Zhou agreed to step down as chief executive officer of AK and to play no role in the company’s shipping or regulatory functions. AK entered into a deferred prosecution agreement in which it agreed to pay a $100,000 fine and retain an independent monitor to oversee compliance. Pursuant to the agreement, the charges against AK will be dismissed if the company abides by the terms of the agreement for 3 years and complies with safety and labeling requirements.

 

DOT-OIG conducted this investigation with the Environmental Protection Agency Criminal Investigation Division and FAA.